The 3-Week Schedule

March 30, 2007

The 3-week schedule is (should be) a subset of the main CPM project schedule. It is more of the ground-level plan that changes on a weekly basis and is used during the weekly production meetings with the general contractor.

It should be used along with the CPM schedule as the primary tool for showing what you plan to do in the short-term, making sure that there is a clear path for you to work in including no conflicts with other trades, all permits are done and RFI’s answered.

Any impacts should be noted on the 3-week schedule and anything that is required to be done by others before you can do your work should be noted on the schedule.

It is not suppose to be complicated, just a simple document with a few notes on it and the activities / work areas over the next few weeks.

When the meeting with the GC is complete the schedule should be sent over to them as a ‘record of what we are going to do.’ This will benefit you if they do not get done what was agreed to during the meeting or if the reschedule something else and disrupt your flow.

If the GC does not want to meet and have regular coordination meetings then you should send it over anyway with a cover stating that this is your plan for the next few weeks and to please contact you if there are any problems they see with the schedule.

If done correctly these can give you a ton of leverage.

On the production side it makes the superintendent really think ahead. At each line item you can question them and make sure they have (1) the materials they need, (2) the manpower, (3) the equipment, (4) all answers to open RFI’s, and (5) any permits they may need.

As the PM if you are looking at the project schedule, comparing it to the 3-week schedule and asking these questions you will more than make up for the couple hours this takes each week by the increased production you get by having all the materials, equipment and manpower on-site you need to get the job done. You will also increase production because you will have the plan documented with the GC and should they get in your way you will have a clear, documented basis for a change.

For the super they will have a clear plan to communicate with their crew and any production planning / tracking is simply a subset of the planned activities in the 3-week schedule.

Like the production tracking this is not about paperwork for the sake of paperwork. It is a critical planning tool for making sure that everything in the short-term is planned for and production can proceed smoothly. Running a job should not mean running around in a constant state of panic trying to put out fires. Some of this will never be eliminated because of the variables in construction but many “fires” could have been seen well in advance with the right planning and solid Q&A discussion between the PM and super/foreman.

See Excel Tools for Contractors on our website for worksheets including a 3-Week Schedule that you can download and use.

Project 2007 - The Challenges of Implementing Project Management Systems

October 20, 2006

Building on our "Profit Happens Here..." series of training and implementation programs we are going to focus heavily on the challenges of implementing project management systems for contractors in 2007.

Our goal will be to develop tools and training that allow contractors to better implement standard project management systems whether they are pre-planning, production tracking or project management software.

There are a myriad of challenges including basic resistance to organizational change, the "gray areas" that Project Managers work in, process documentation specific to a company, etc.

During the course of development we will be interviewing approximately 100 contractors for their input. Those contractors that volunteer a few hours of their time for the interview will get a free copy of our findings and the overall program guide. Please contact us if you are interested in discussing your company's project management systems with us.

Job Cost Variables (What Your Reports May Not Show)

August 21, 2006

Generally speaking the management of job costs involves four un-related variables – or profit levers.

Most job costing and budgeting systems show only the summary of these four levers which does not tell the whole picture nor does it provide the critical feedback between operations and estimating so that the entire system can be fine-tuned.

If the project team is only focused on the bottom-line job costs there is a huge opportunity for improvement in profitability as the entire project team begins to understand each of these levers and how they individually relate to job costs. We will dive briefly into a discussion of these four critical levers and how they relate to job costs.

Method: The method chosen for installation – for example, when trenching you could choose benching, sloping or using shoring. You may also choose a trenchless (directional drilling) installation. Each method has different production levels and costs associated with it. During the estimating phase specific installation methods are chosen for each activity. During the pre-planning of the project adjustments to these methods may be made. Production target rates and the project budget are based on the method. Changing methods may lower or increase costs but a change in method should not be considered the same as a production increase or decrease.

Procurement: The amount actually paid for a product or service. Getting pipe for $2.50 per foot versus $3.10 per foot is an example of procurement management. Average labor cost increases or decreases are also examples of procurement. Though these will lower costs they are distinct from quantity or production variables. Even if the procurement leads to securing a piece of equipment cheaper than estimated this is still not considered a production management item.

Quantity: This is a huge variable and feedback to the estimator is very important because variations have big effects on profitability but are also relatively simple to fix through take-off methods. It is very dangerous to lump quantity into production. These are two very distinct parts of the estimate process and feedback must come back separately in order to truly refine the process. The key is looking at a task and figuring out a common unit to view as a quantity. For some tasks such as trenching this may be simple (linear feet) but for other tasks such as electrical branch rough-in this may be more challenging because of all the different sizes and types of conduit involved. It is on these tasks that are more difficult (such as electrical branch) that it is even more likely that the quantity take-off process can be refined to be more in-sync with operations.

Production: The actual rate a crew produces at. For example getting a backhoe crew to completely install 300 feet of 4” sewer laterals in an 8 hour day is better than having the same crew installing 250 feet in the same 8 hour day. There are a lot of variables involved in making this comparison so it is important to eliminate as many variables as possible. The first variable we eliminate is cost variations by establishing average labor and equipment rates based on the estimate and inclusive of a standard mobilization charge spread over 5 days. Whether this cost number is a little high or a little low it will allow comparison between days. The second major variable is in the work complexity. The laterals on one day may be deeper, shorter or the ground may be harder than those done on the next day. Production tracking is the most challenging of the variables but also the one with the biggest opportunity for increased profitability (or losses.)

When systems are put in place to monitor each of these variables separately and when your project team starts discussing these four profit levers while pre-planning the project, during construction and in the post-job review your overall profitability will increase significantly.

Why Track Production?

Can you imagine an NBA game without the fans in the stands, cheerleaders on the floor or a scoreboard?

This seems unimaginable yet these are the circumstances we typically work with every day in the construction industry.

Could you imagine playing basketball for 8 hours and not having some way to keep track of how many baskets your team scored? Most construction crews go to work and their only clearly defined goals are start, finish and break times.

Could you imagine playing basketball for 8 hours against another team and only knowing how many baskets your team had scored? For the few crews that go to work everyday and can actually tell exactly what they accomplished even fewer have a way to compare whether their production was good or not.

Could you imagine playing basketball everyday for months without knowing the score? That is exactly what construction crews are doing when they are relying on job costs and budgets to tell them whether they are over or under budget (winning or losing).

Could you imagine a coach letting their team play basketball for several months with little feedback and then just showing up and telling them that they were way behind the other team? That is what happens in many companies when the project manager finally sees the results of daily production on the job cost reports.

Could you imaging a coach trying to lead his team to victory by defining plays, setting strategy, making player decisions, etc. all based on his “gut” feeling without knowing what the score was or what the other team was doing? Many superintendents and foremen are forced to work in this environment – sometimes their “gut” pays off and sometimes it does not.

Could a coach pull together all the diverse personalities and egos necessary to win and make them work together effectively if they were each focused on different aspects of the game rather than the common goal of getting the ball in the basket? Many project teams function like this each and every day with each person focused intently on what they think their individual responsibilities are or should be without looking at what they could do RIGHT NOW to facilitate getting the ball in the basket.

For the construction crew production tracking can provide that scoreboard and unite the team. Production tracking is significantly different than job costing because it is done daily, even hourly.
Production tracking can be used to set daily goals with hourly milestones.

Production tracking creates a competitive environment where the crew is competing against and trying to beat the budgeted production, their past production or the production of other crews within the company.
Production tracking creates a common language within the company that can be shared by everyone from the apprentice laborer up through the operations manager.

Production tracking creates a common measurement (dollars) so that activities can be prioritized within in the project team. EVERYONE on the project team should be focused on the activities that will generate the most money every day.

Learn about how production tracking is different from job costing.

IEC Announces 2005 Electrical Project Management Institute

December 24, 2005

IEC > IEC ANNOUNCES 2005 ELECTRICAL PROJECT MANAGEMENT INSTITUTE

The Independent Electrical Contractors have teamed with Purdue University to offer a structured 80 hour project management course geared specifically towards electrical contractors.

This is a fantastic idea and we are looking at a way to provide a similar structured education for electrical contractors in Califonia through WECA - see our beta test of Project Management Classes starting in January 2006.

Talent - Performance & The Sweet Spot

November 29, 2005

"Management is doing things right; leadership is doing the right things." - Peter Drucker

Keeping everyone on your team in the sweet spot of performance has to do with both leadership AND management.

Leadership is required to set the right team goals to begin with which will make it a lot easier to get people to align their personal goals with those of the team.

To truly gain a performance advantage every detail about this alignment process needs to be managed. Great companies like General Electric have very disciplined human resource programs that are focused on making this alignment happen.

The fourth element of this alignment is time - organizations, personal development, market forces and personal circumstances are all dynamic and it is unrealistic to think that everything will stay aligned.

What is important for building a strong organization is making sure that (1) the current alignment meets or exceeds the current needs of the business and (2) that you understand and plan for things to become out of alignment.

This is often very hard for the smaller, family owned business because their whole lives are wrapped up in the business and have been for quite some time, possibly even their whole lives. These owners and managers take it very personal when things become out of alignment; when good employees leave the company; when people don't seem to care as much as they do.

Let's dig a little deeper into this alignment starting with the Team Goals. Can you clearly articulate what you are building, where you are going, how you serve your customers, and how you see people fitting into your team? This is all about leadership - it is a lot easier to attract and retain good people for the right cause than if you appear to just be scrambling to make some money somehow.

The second thing you need to work on is getting to know your people; really know them. What do they do for fun? What is their family like? What are their personal goals? Career goals? When you start to understand these things about your team you will see where alignment may come together in the future or come apart and you can plan for it.

The third thing to look at is whether the proper skills are present. All the desire in the world won't make up for a lack of skills. This is something you can plan for with both internal and external training, possibly even including this in some type of rewards program.

Here's a typical example of the cycle of alignment and why it is important to understand the direction things are heading:

You are a company that requires a lot of travel and long hours from your foremen but you compensate them well for their efforts. You've got this great guy named Joe who has about 4 years of experience. He is single, doesn't own a home and is like a sponge when it comes to learning and really wants to become a foreman.

Through regular leadership reviews which are part of your management processes you recognize him as a "Strong Potential" and realize that while he doesn't have all the skills today the perfect alignment is coming so you make a plan for him to accelerate. You place him in a series of rotating positions with your best foremen and superintendents for the next 2 years.

Now you have "Perfect Alignment" and things are going great. Joe is out of town running job after job. He's loving life because he's learning a lot and has fun traveling. You couldn't ask for anything more.

After 4 years Joe meets someone back home over the Holiday's and they end up getting married. Another year goes by and they buy a home together and start planning for a family. Joe becomes increasingly tired of traveling and eventually leaves the company.

Was this a bad thing? Yes and no. If the management processes in the company did not pick this up on the radar and start planning for it then it is a very bad thing. If there is resentment on either Joe's side or the company's side then the situation wasn't handled well.

Could Joe's job have been salvaged? Possibly - if the company had a position opened up that didn't require the traveling AND Joe had been prepared with the skills required for the job. It is quite possible that the job could not have been saved. There may not have been another position open or Joe may not have had the skills to fill that position.

To avoid talent gaps in the company this problem should have been spotted years out and plans should have been underway to find and develop the next "Joe." To avoid resentment there should have been discussions early and often with Joe to clarify the changing of personal goals, what his plans were, how the company could help, etc.

As a manager you know these situations end poorly way too often.

Good companies have good leaders that do their best to work through these situations. GREAT companies have a very structure process in place to generate a "Talent Pipeline", to maintain alignment as long as possible and to help people make transitions both inside and outside the company.

Talent - Why Alignment Matters

November 25, 2005

A business is a system designed to serve a customer AND produce a profit. This is a very complicated system consisting of hundreds or even thousands of processes all designed to serve the customer and produce a profit. Managing all these processes are people - the talented people that make up your team.

Like an engine all parts have to be properly aligned or you will experience loss loss of horsepower, inefficiencies and possibly failure.

So, what do we mean by alignment - it quite simply means that for every person on your team you should be able to draw a clear line to the operational process they manage, the operational processes that support them, the systems that measure their performance and provide feedback, the customer they are serving and how that customer fits into your strategy.

Sounds simple enough - but in reality is very challenging.

Often compensation and reward systems don't reward the correct behavior.

Financial statements are prepared to meet basic tax requirements, not provide detailed feedback on a specific business process, team or customer.

Internal departments such as accounting, purchasing, equipment or deliveries become inwardly focused and lose sight of how they fit into the system; how to serve the customer and how to produce a profit. Focusing on a budget IS NOT the same as focusing on serving the customer and producing a profit.

How do you get things aligned?

Start by working to define everything your company does as a process. Take one small piece of the company at a time. If you do a few major processes per month you will achieve phenominal results in 1-2 years.

Now describe how every process ties into either serving the customer or producing a profit. Many processes are there for checks and balances - do a quick calculation of what the cost of the process is versus the downside of not checking. You will probably find that you can eliminate some processes all together.

Finally, assign one or more of your team members to manage each process. Set your compensation, reviews and rewards based on how well each employee manages these processes.

"Manage processes and lead people." - Michael Gerber

Recruiting - Leave No Stone Unturned

HousingZone.com - Leave No Stone Unturned

Excellent roundtable discussion about how to find quality employees. Succeeding in the talent game today requires some innovation - if you think that running an ad in the classified's is a strategy you are missing out on a world of other recruiting possibilities. Some notable ideas.

1. School Career Days/Intern Programs: These people are very motivated - they have already made an investment in themselves and are looking to put those new skills to work. The problem - if an employer goes there for the first time they are unlikely to get noticed and will feel that this is a huge waste of time. The reality is that you will have to show consistency. Pick a school or program - define your position as a company clearly - define why you are the best choice to work for - show consistency by showing up to every event and presenting career advice to the students. If you are consistent you will start to see results after a few events.

2. Emplyee Referrals: Don't overlook this and you should reward this - give your employees a bonus for finding good people but make sure you don't pay until they have been on board for 90 days or so.

3. Recruiters: This article downplays recruiters and many people have had bad experience with recruiters. There are two things that lead to the negative image; the first is that there are a lot of bad recruiters out there who simply work as a middle person looking up potential "candidates" in the help wanted ads. The second is that many employers don't clearly define either the job or the search. To find success with a recruiter you should understand that you are goigng to be spending a lot of money to find someone very specific. Spend an appropriate amount of time defining the position, goals, your culture, how they fit with your company, etc. Now go interview a bunch of recruiters - ask them how they find candidates and how their research department is run. Good recruiters have teams of people who will draw a geographic area around your business and then start calling into those businesses to find the top talent. The recruiter will then screen these people before sending them to you for an interview. If this process is done right this can be a very powerful way to find top-level help.

4. Advertise Everywhere: You should make it clear on all your jobsites, all your vehicles and possibly even on your company shirts that you are always looking for the best talent. Keey your name in front of everyone all the time - sooner or later when someone is looking to make a change you want them to remember your company.

5. Smaller Companies: This article makes an excellent point about recruiting the smaller business owners who may be tired. I believe in designing a company structure to be entrepreneurial in structure from the strategy to the accounting system to the organizational chart so that these prior owners would fit right in.

Talent is a very important part of your business - you cannot grow without spending a lot of time developing a good "Talent Plan".

Learn more about organizational planning and alignment.

The Need For Proper Labeling

May 01, 2005

More discussion coming soon based on experience and sparked by an article I saw in the latest issues of Electrical Contracting Products called "A Case for Labeling:  The critical - but often neglected - element of network cabling"